5.11 The case of ARCO (II)

The case of ARCO also led to a preliminary ruling. Paul Vervloet and other investors felt disadvantaged because they did not qualify for the cooperative guarantee, since they had invested their money not in shares in ARCO but directly in shares in Dexia. For that reason, these investors considered that the cooperative guarantee scheme infringed the principle of equality. They therefore instituted legal proceedings against the Belgian State. In the context of these proceedings, the Grondwettelijk Hof (Constitutional Court of the Kingdom of Belgium) requested a preliminary ruling.

The case of ARCO also led to a preliminary ruling. Paul Vervloet and other investors felt disadvantaged because they did not qualify for the cooperative guarantee, since they had invested their money not in shares in ARCO but directly in shares in Dexia. For that reason, these investors considered that the cooperative guarantee scheme infringed the principle of equality. They therefore instituted legal proceedings against the Belgian State. In the context of these proceedings, the Grondwettelijk Hof (Constitutional Court of the Kingdom of Belgium) requested a preliminary ruling.

On 21 December 2016, the Court rendered its judgment. In essence, the Court was asked to assess two aspects of the cooperative guarantee scheme. In the first place, the Court was requested to examine whether a guarantee scheme such as the Belgian one was compatible with the EU deposit-guarantee legislation laid down in Directive 94/19/EC (“the DGS Directive”).

In line with the Opinion of Advocate-General Kokott of 2 June 2016, the Court concluded that the DGS Directive does not oblige nor prevent the Member States to include shares held by natural persons in recognised financial cooperatives in their respective national deposit-guarantee schemes.

In the second place, the Court was requested to assess the validity of the ARCO- decision. In the main proceedings before the Belgian court, ARCO was calling into question the validity of the ARCO-decision (by recourse to the same arguments as those on which it also based its action for the annulment of that decision before the General Court in case T-711/14).1 Among others, ARCO argued that the cooperative guarantee scheme did not confer a selective advantage on the ARCO cooperatives. The Court, however, considered that there was no doubt that the ARCO Group benefited from the cooperative guarantee scheme. It was that guarantee scheme alone which protected the ARCO Group from the imminent flight of private investors in the ARCO Group. The Court concluded that the examination of the questions had disclosed no factor such as to affect the validity of the ARCO-decision.